BADM 2160 INTRODUCTION TO PURCHASING
Supply Chain Management by
Burt, Petcavage and Pinkerton
Eighth Edition

Chapter 1

The overall objective of this chapter is to give the reader a sense of the importance of purchasing and the supply chain and how they fit in to and impacts the business environment.

Vignette:
Careers in Purchasing and Supply Management

1. Does purchasing sound like a class (or career) you would be interested in? Why or why not?
2. Share with your classmates what you know about the function of purchasing.
3. Can you identify someone who might be a mentor during your early days if you decided to pursue a career in purchasing? (Note: This individual may be a great candidate for your Interview Project!)
Non-value added costs – making sure that there are no costs being added that doesn’t impact the final product
10. Supply chain cost – proper selection, training and education of employees, along with appropriate technology

Define:

ROI: Return on investment

Supply Chain: The process of acquiring goods, services and equipment from other organizations Value Chain: a series of organizations which add value to good and services flowing from Mother Earth to the end customer

What has a greater impact – increasing sales by 10% or lowering costs by 10%? Lowering costs would have a greater impact on consumers. If the costs were lowered, consumers are more likely to buy.

Explain your choice:

APPENDIX: AN OVERVIEW OF THE MECHANICS OF SUPPLY MANAGEMENT

List and define the steps in the Typical Purchasing Cycle:

1. Recognize, define and describe the need – categorize the need (ex; what type, pricing, timing of need), and identify what the need is for
2. Transmit the need – create a requisition or material requirements planning schedule
3. Investigate and select the supplier – look into supplier relationships that have already been established; check into quality and pricing; compare pricing with competitors
4. Follow up the order – make sure goods are delivered in timely fashion, and entered into inventory; make sure shortages and